Petchems snub propane despite falling prices

07 February 2014 18:25 Source:ICIS News

LONDON (ICIS)--Petrochemical firms are showing little buying interest in propane cargoes despite falling prices, sources said Friday.

The propane-naphtha spread has widened to -$105/tonne, but buyers are preferring lower-priced ethylene as the feedstock of price.

“Even at propane-naphtha around -100, [there is] still no sign of increased interest from petchems. That’s again being explained that since ethylene prices remain low propane is not the preferred feedstock,” said one shipbroker.

A petrochemical buyer added: “There’s no demand. from petchems because of the downstream margins. Propylene is much stronger than ethylene so everybody is looking at heavier feedstock.”

 

By Richard Welbirg